Consider a Consol Bond with a Required Yield to Maturity

question 50

Multiple Choice

Consider a consol bond with a required yield to maturity of 9%.What is the consol bond's duration (round to two decimals) ?

• A)Infinite as the bond has no maturity
• B)0 years
• C)9.33 years
• D)12.11 years

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Definitions:

Operating Cycle

The time period between the purchase of inventory and the collection of accounts receivable from the sale of that inventory.

Current Asset Accounts

Balance sheet accounts that represent resources with value owned by a company, expected to be converted into cash or used within a year.

Cleanup Loan

A short-term loan used to clear outstanding debts, often as a way to improve financial metrics before seeking longer-term financing.

Bankers' Acceptance

A short-term debt instrument issued by a company but guaranteed by a bank, commonly used in international trade to facilitate transactions.